'Poor service' and inflation will cause long-term damage to tourism, warns Fáilte Ireland

Good service in pubs and restaurants relies on having enough staff.

Fáilte Ireland has warned that a lack of staff in the hospitality industry could lead to poor service and “long-term reputational damage” for tourism here.

The tourism agency has also flagged concerns over rising inflation, a loss of hotel accommodation due to refugees fleeing the war in Ukraine, and how further Covid restrictions this winter could hit visitor numbers.

In Fáilte Ireland’s latest risk register, it said “staff contractions” in the industry represented the single biggest challenge facing Irish tourism.

“Poor service and depressed industry growth,” it said, “[could lead] to long-term reputational damage to Ireland as a destination for both domestic and international travellers.”

Inflation concerns

There are also concerns about rising inflation in Ireland, which is higher than in other popular destinations.

This had the potential to “suppress the ability of the industry to meet consumer demand and affect competitiveness”, according to the risk register.

Fáilte Ireland is working directly with the Department of Tourism and that a supporting careers in tourism project was already under way.

Projects are under way to tackle perceptions of Ireland as an expensive place to visit, with Fáilte Ireland working with industry on ways to offer better value for money to visitors.

The agency is also worried about the potential for its remit being changed by the Government, and potential shortfalls in funding.

It said budgets were being hit “by increased costs due to inflation” and it had met with the Department of Tourism to discuss the implications of reduced budgets.

The risk register added: “A full review of the profile of capital spend has been completed and a list of projects 'at risk' have been compiled and shared with the department.” 

Impact of Ukraine war

Classified as medium risk is the war in Ukraine and how it could result in a “significant reduction” in accommodation for tourism.

Fáilte Ireland said it is helping monitor trends on unregistered accommodation supply and the dispersion of Ukrainians around the country.

The size of the rental car fleet was flagged at 50% of the levels from 2019. This could “potentially result in lost visitors”, it said, with widespread complaints about the price of hiring a car throughout the summer.

Fáilte Ireland said it is supporting efforts to reform Vehicle Registration Tax (VRT) to improve the finances of rental companies and support fleet investment.

Another concern was the high cost of insurance, which the risk register said could result in “many businesses unable to continue in operation”.

Fáilte Ireland said it offers support to the tourism industry on ways they could lower their risk profile and influence the price they were quoted.

It also recommended creating groupings of similar businesses — particularly for indoor or outdoor activities — so they could be insured together and bring their individual costs down.